Question

Commercial Law I Assessment 3 - CASE STUDY/RESEARCH REPORT - Due Week 11 – 30% weighting

PART A – Case Study – 1000 words

Audrey is employed as the Events Manager for NSW Wealth Managers Association headquartered in Sydney and she has the responsibility for arranging the annual member’s conference. The theme of this year’s conference is ‘investment and superannuation’ and Audrey’s role is to ensure that all of the delegate’s requirements are met including accommodation, food, clothing, and travel. The annual conference will be held in Surfers Paradise, QLD this year and Audrey has to organise everything. Audrey starts by looking up the website of XYZ Tours in order to book a bus for the purpose of the delegate’s travel to and from the hotel to the conference centre during the 5 day visit to Surfers Paradise. The website clearly states that all bookings must be online. Audrey telephones the company on 1 February 2020 and has a general discussion with Tommy, the company representative, about the availability of a bus, the dates and prices. She does not specifically confirm a booking or pay a deposit in that conversation. A week later on 8 February 2020, Audrey posts a letter to XYZ Tours’ office in Surfers Paradise stating that she wishes to proceed with her booking as discussed with Tommy. In addition to the ‘booking’ that she makes with XYZ Tours, Audrey books all the accommodation and other conference and travel activities through ‘A Class Travel’ a travel agency. In August, Audrey realises that she has not yet organised any of the specially made jackets which the delegates will wear during the conference. She goes to ‘DEX Outfitters” to make these arrangements. She orders the jackets to be made with ‘NSW Wealth Managers Association – Annual Conference 2020’ embroidered on the pocket. Audrey agrees to buy the jackets for $275 each after the shop owner says “Trust me, I have been in business for 20 years and my clothing is made from the finest quality cotton and workmanship. You will have no problems with the clothing. Look at this quality. I promise you that nothing will go wrong.” Audrey is so stressed that she has left things to the last minute and tells the shop owner that if he does not provide the clothing within 14 days she will destroy him and his business. When the clothing finally arrives Audrey discovers the jackets are not made from cotton and the logo says “2010” rather than “2020”. One week before the delegation is due to travel from Sydney to Surfers Paradise, the QLD Premier declares a state of emergency as a result of the worsening coronavirus pandemic and spreading infections, and decides to close all the borders. All flights are cancelled and all roads into QLD are closed. As a result, all event gatherings are prohibited until further notice. ACBUS201A – S2 2021 Assessment 31/8/2020 Required: Based on the above information and your knowledge of Australian contract and consumer law, answer the following questions. 1. Outline and describe any legal contractual issues in relation to Audrey’s booking with “XYZ Tours” and whether or not she/NSW Wealth Managers Association has/have a contractual arrangement with them. Use relevant cases to support your answer. 2. Outline and describe whether or not Audrey’s conduct towards the shop owner at ‘DEX Outfitters” has any impact on the contract she has agreed to for the manufacture of the delegate’s jackets. Use relevant cases to support your answer. 3. Advise Audrey if her contract with ‘A Class Travel’ is enforceable, given the state of emergency declaration, worsening coronavirus pandemic and the subsequent cancellation of all event gatherings. Use relevant cases to support your answer. 4. Due to great disappointment following the cancellation of their annual conference in Surfers Paradise, the NSW Wealth Managers Association decides to reschedule the conference to Katoomba in the Blue Mountains region of NSW. Unfortunately this trip is a complete disaster, as the travel agent Audrey used failed to make bookings adequately to accommodate the whole delegation, didn’t book enough tickets to the scenic mountains tour and failed to adequately cater for all attendees at the closing dinner. With reference to this additional information, outline whether or not Audrey and/or the NSW Wealth Managers Association may sue for damages? Fully explain your answer and use relevant cases to support your answer. 5. For the purposes of the Australian Consumer Law (ACL) discuss whether or not Audrey would be a Consumer in her dealings with ‘DEX Outfitters’. 6. Has the shop owner of ‘DEX Outfitters’ committed a breach of the Australian Consumer Law (ACL) in relation to his statement “Trust me, I have been in business for 20 years and my clothing is made from the finest quality cotton and workmanship. You will have no problems with the clothing. Look at this quality. I promise that nothing will go wrong” and the circumstances surrounding the jackets received by Audrey? Use relevant cases to support your answer.

Answer 1

1.    

• i. In the present case, the XYZ Tours specifically mentioned on their website that all the bookings must be online. Thus, there intention is clear that the contract shall be entered online. But Audrey posted a letter whereby she offered to make the bookings. Thus, here no contract has been entered into between XYZ Tours and Audrey or NSW Wealth Managers Association. In the case of Smith v. Hughes, the court held that where is no meeting of minds or consensus ad idem, there is no contract.
• ii. In the present case, Audrey's statement that she will destroy him and his business if he does not provide her the clothing within 14 days is not right. In a way she is threatening that person.
• iii. This is the example of frustration of contract, when due to some unforeseen circumstance, not in control of either party, the contract cannot be performed. In this case, neither party can sue for the non-performance of the contract. In the case of Codelfa Construction Pvt Ltd v. State Rail Authority of NSW, it was held that where the performance has become impossible, the contract is frustrated.
• iv. Yes, here A Class Travel is bound to pay the damages to the company as they failed to perform the contract. There has been breach of contract. In the case of Tramways Advertising Pty Ltd v. Luna Park Ltd, it was held that the party committing breach is liable to pay damages occurring due to such breach.
• V. Acc. to Competition and Consumer Act 2010, a consumer is a person who has acquired particular goods as a consumer if the price of the goods did not exceed $40000. A person who has acquired goods whose price exceeds $40000 is still a consumer if he acquired the goods for personal use. In the present case, Audrey acquired goods for the use of the delegates. Thus, here, Audrey is not the consumer.
• vi. Yes, here DEX Outfitters has made a statement in reliance of which Audrey agreed to enter into the contract. Thus, they are responsible for making false statement to Audrey with an intention to induce her to enter into the contract. In Curtis v. Chemical Cleaning and Dyeing Co. it was held that contract entered into with fraud is voidable at the option of the aggrieved party.